Deyor Rooms: A New Challenger to OYO and Zo in Hotel Aggregation Space

Deyor Rooms has achieved 1000 room nights in its first month, reaching to 5000 nights in first quarter of operations.

Delhi-based 6 months old startup, Deyor Rooms is a budget hotel aggregator which aggregates selected budget hotels and converts them into Deyor Star hotels after a quality audit. The startup has achieved 1000 room nights in its first month, reaching to 5000 nights in first quarter of operations.

Its mantra is aggregating budget hotel properties that requires minimal investment but can assure stickiness. It limits heavy capex but aggressive on investing in hotel staff on training, processes, customer servicing and therefore certifying the hotel with its Deyor star rating.

Deyor Rooms founding team includes Redcliffe Capital’s Dheeraj Jain, Sanjeev Newar and Chirag Gupta. The team of 30 people raised its first round of capital ($500K) earlier this year from Jain and other unnamed UK investors and currently raising another growth capital round. The startup aims to utilise the raised funding to expand its operations into newer cities, standardise hotel rooms and step up marketing.

Jain, who is an alumnus of Cass Business School, City University London and a partner at Redcliffe Capital, has a separate team to manage his investments in startups such as Shipsy, Mappr, Zocalo, Simpli5d, Qdesq and Burger Singh.

Talking to iamwire about the Deyor’s differentiation from others, Chirag maintained- “It is simplifying the model by offering budget stay at 3 price points (budget, comfort, luxury) to retail and 2 price points to corporates. It also focuses on pilgrimage towns and tourist destinations including the vegetarian only hotels.”

The startup has a portfolio of more than 100 hotels in 22 cities including Delhi NCR, Jaipur, Agra, Mumbai, Bengaluru, Pune, Mumbai, Rishikesh, Shimla, etc. “We are now heavily focusing on B2B business and therefore, require immediate scale-up,” added Jain. It plans to cover 300 hotels in 38 cities by March-end.

“To ensure the right operating procedures on standardizing fragmented hotel properties this startup formed core advisory team of industry professionals from large hotel chains like Carlson, ITC, and UK budget hotel chain Premier Inn’s. Not only the customer experience, hotel owners gave very high ratings on satisfaction to Deyor who claims the Satisfaction Index to 90 plus in its first few weeks of operations,” Chirag said.

Deyor categorizes its hotels into 3, based on pricing, location and quality.

The bulk of its bookings comes from Indian corporates, seasonal events and rest from retail who are experiencing this brand first time. Deyor directly competes with OYO Rooms and Zo Rooms. Anchored on an asset-light business model, these firms are essentially aggregating standalone budget hotels, strapping them with a common brand with a promise to the consumer to offer a standardised set of amenities like a conventional budget hotel chain.

Online travel agencies (OTAs) are also showing their interest in hotel aggregation business. Goibibo recently launched a budget accommodation goStays, starting at Rs 999 per day (with free breakfast) at multiple Indian cities and Yatra.com also unveiled TG Rooms and TG Stays with a starting price of Rs 499 in over 60 cities.

Even, Paytm announced its foray into hotel aggregation. For this initiative, the company has partnered with Goibibo, Ezeego1 and TSI Yatra. Going forward, the company will also offer international hotels by tying up with platforms like Expedia and Booking.com. It would be exciting to see how the existing players deal with such competition from Paytm.